Family members are generally responsible for notifying life insurance companies of a policy owner’s death. But all too often, family members aren’t even aware a policy exists, or don’t know how to find it.
It is estimated that more than one quarter of all life insurance policy benefits go unclaimed on death of the insured. By law, missing life insurance policy benefits is held in trust until claimants come forward.
If you have clients or prospects who have reason to believe a life insurance policy exists but they don’t know how to track it down, here are seven tips you can provide to help them, courtesy of the American Council of Life Insurers (ACLI).
As an alternative, MIB, an insurance membership corporation, offers a policy locater service for a fee. For more information about this service, visit www.mib.com/html/lost-life-insurance.html.
- Check your loved one’s papers and address and telephone books to look for life insurance policies and the names of insurance agents. Contact every insurance company with which they had a policy, even if you’re not sure the policy is still in force.
- Check with the employee benefits office at their latest and previous places of employment. Or, check with the union welfare office.
- Check bank books and canceled checks for the last few years to see if any checks may have been written to pay life insurance premiums.
- Check the mail for one year after death for premium notices, which usually are sent annually. If a policy has been paid up, there will not be any notice of premium payments due. However, the company may still send an annual notice regarding the status of the policy or it may pay or send notice of a dividend.
- Review your loved one’s income tax returns for the past two years. Look for interest income from and interest expenses paid to life insurance companies. Life insurance companies pay interest on accumulations on permanent policies and charge interest on policy loans.
- Check with the state’s unclaimed property office to see if any unclaimed money from life insurance policies may have been turned over to the state. If, after a number of years, an insurance company holding the unclaimed money cannot find the rightful owner, it turns the money over to the state.
- Of course, you may wish to contact life insurance companies directly to see if a policy exists. Each state insurance department has a listing of life insurance companies licensed to do business in its state.
Contacting the company that services the life insurance policy
If you are the owner or beneficiary of a life insurance policy written long ago, you may need help locating the life insurer that services and pays claims on the policy. Over the years, a policy owner may lose touch with the life insurer due to frequent moves, or the company that issued the policy may have changed its name or merged with another company.
Two sources of information can assist you in finding the life insurance company that currently services your policy:
1. The state insurance department of the state in which the insured person resided at the time he or she bought the insurance policy.
2. Best’s Insurance Reports, available in the reference section of many larger libraries. This annual update lists insurance company names and addresses, as well as insurers’ name changes, mergers and other changes.